Rather than relying on national news stories about the state of the real estate market, the Realtor Association of Northwest Chicagoland suggests gathering information closer to home. To get the proper perspective on the value of real estate, talking to a local Realtor could be your best bet.
"Perceptions about real estate have been skewed in recent months due to the overwhelming focus on national figures," said Piero Orsi, president of the Realtor Association of North West Chicagoland. "While average sales and prices help us identify trends, the fact is all real estate is local -- conditions vary greatly from one city to the next. Unfortunately, that news is largely unreported." The following are the facts on three popular misperceptions in the real estate market:
Misperception: No one is buying a home, and home prices are falling rapidly.
Facts: According to the Illinois Association of Realtors, home sales are expected to reach about the same level that we saw in 2000, which was still a great year for real estate. Nationally, this year is projected to be the fifth best year on record for home sales. That means an approximate 5.5 million homes will be sold in this year alone.
While it's true that the growth rate for Illinois median home prices is down slightly from last year, the median home price in Illinois has increased more than $40,000 since 2002. And, the Chicago metro area showed over a four percent price gain in the third quarter of 2007 compared to third quarter 2006. Again, each market varies. A significant share of metro areas in the state saw gains in the median price in the third quarter of 2007.
Misperception: Foreclosures and delinquencies are rising rapidly in every state.
Facts: According to RealtyTrac, Inc., three states -- California, Florida and Nevada -- are responsible for most of the increase in foreclosures in the third quarter. Illinois actually saw a 4.2 percent decrease in foreclosure filings in the third quarter compared to the second quarter of this year.
Misperception: Stocks are a better investment than real estate.
Facts: Houses are not like stocks. Homeownership is designed to build wealth over the long term. On average, the value of a home nearly doubles every 10 years.
During the past three decades, home values increased an average of 6.6 percent per year. According to the Federal Reserve Survey of Consumer Finances, the average homeowner has 36 times the wealth of the average renter. Homeownership is key to climbing the economic ladder.
Owning a home also helps strengthen our families and our communities. You can't put a price on that.
"When you consider the facts, it's easy to see why many people are choosing to buy a home this year. There are some challenges in the market, but there are many more opportunities in local markets throughout Illinois today," said Orsi. "Real estate continues to be a solid long-term investment."